Large-cap funds are considered prudent choices for risk-averse investors when compared to their small-cap and mid-cap counterparts. These funds have exposure to large-cap stocks, with a long-term performance history and offer more stability than mid or small caps. Companies with market capitalization of more than $10 billion are generally considered large cap. However, due to their significant international exposure, large-cap companies might be affected by a global downturn.
Meanwhile, investors looking for a bargain, i.e., stocks trading at a discount, are mostly interested in value funds, which pick stocks that tend to trade at a price lower than their fundamentals (i.e. earnings, book value, debt-equity) and pay out dividends. In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to trending markets. However, investors interested in choosing value funds for yield, should check the mutual fund yield as not all value funds comprise solely companies that primarily use their earnings to pay out dividends.
Below we share with you three top-ranked, large-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of large-cap value funds.
Thrivent Large Cap Value S TLVIX invests a major portion of its assets in equity securities of large-cap companies. The fund advisor focuses on investing in both U.S. and non-U.S. large-cap companies that have market-cap similar to those included on the MSCI USA Large Cap Index, the S&P 500 Index and market-cap categories put out by Lipper, Inc.Thrivent Large Cap Value S has one-year annualized returns of 11.9%.
Kurt J. Lauber is the fund manager of TLVIX since 2013.
Vanguard US Value Investor VUVLX seeks growth of capital and income for the long run. VUVLX invests all of its assets in value companies having low price/earnings (P/E) ratios. The fund focuses on acquiring stocks of large and mid-cap companies having impressive growth potential and favorable valuations. Vanguard US Value Investor has returned 8.8% in the past year.
As of December 2017, VUVLX held 254 issues, with 3.23% of its assets invested in JPMorgan Chase & Co.
TIAA-CREF Large-Cap Value Premier TRCPX invests a large chunk of its assets in equity securities of large-cap companies, which are expected to be undervalued. TRCPX seeks a high level of returns primarily through growth of capital. The fund invests in companies as defined by the fund's benchmark Russell 1000 Value Index. TIAA-CREF Large-Cap Value Premier has one-year annualized returns of 6.6%.
TRCPX has an expense ratio of 0.55% compared with a category average of 0.81%.
To view the Zacks Rank and past performance of all large-cap value mutual funds, investors can click here to see the complete list of funds.
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